Now that we got a strong rally off some reversal support in the indexes. I am watching these what-if bearish reversals and documenting them here to see if they have any strength.
My thoughts (which could be wrong lol!!) but these weekly bearish what-if reversals could act as a single push back down below the prior low from this big rally from APPLE earnings yesterday at the close of May 2nd.
Here is why I still have hedges to my longs (and added more):
- May 6 monday has double direction changes in many markets
- May 7th Ru elections
- Weekly arrays in indexes show Direction Change & Panic
- Lot of volatility on May 6th monday (surprise geo politics?)
- Look at commodities — CORN, SOYBEAN, going up fast
Look at defense (DFEN) going up hard — war stocks - If we get low in week of May 7th for oil — that is when I buy more DBO
- Watch Gold (GLD) for week of May 7th low – this would be buy for war times
So while I had a hard time understanding a rally this week, my thoughts were focused on May 7th. As I told some friends and family, we look to have a bounce but just maybe there may be shenanigans on May 7th (RU elections) and this could scare market for that week.
With that said… the May 6th monday is showing something (double direction change = possible big move), lots of volatility = big move), then counter of trend for 3 days after monday. So if this is a high, we may retract… that would also give more credit to the weekly what if bearish reversals popping up today which we are testing (view charts below).
Anyhow, I am long-term bullish, but I believe there is a market spook that may come into May 7th. Hard to say… but I am prepping insurance for downside here (not financial advice just so I can rest at night lol!!) Also this is to document the market to learn from the dynamics of the reversals and array system I am using.
These are easier long plays and working well so far… as we go into May – Here is what I am looking or already bought
NasDaq futures:
- notice the pink bar — this is the what if bearish (18,051.50)
- we close below, this could give some downside (new low) into May 7
- This would be huge fake out in market
- But I am expecting June to be higher lol with month arrays.. lol (Hard call here)
- So placing insurance
- May 6th double direction change
Quick Update: Too early but interesting…
- Perfect touch on weekly bear what if above price
- Did not allow time to get in… no bid at that price
- Good setups, do not allow to get in easily at high or low…
SPY
- Same thing weekly bearish (pink bar) at 512.76
- If this reversals closes below, maybe some downside
- This gives me a insurance signal
- Also Double Direction change on May 6th
Quick Update at 5/3 10:40 am (Too early to say but interesting)
- Notice the perfect test of the weekly bearish (pink bar)
- Quick snap back (no more buyers — bid goes down)
- Strong highs or Strong low setups — never give majority time to catch it
- Too early to say, but insurance is on just in case for May 7th week
Dow Jones (DIA)
- Direction Change and Panic next week
- Still not get above weekly bull (green)
- Double Direction Change on May 6 (like the other indexes)
